A tax is a mandatory contribution to state revenue. It has been levied by the government on employee’s income and business profits. Tax season is coming and it is the time to get ready to file your tax. Filing for the year of assessment 2023 will begin on 1st March 2024.

Stay informed and prepared for Tax Season 2024. Learn about key updates, deadlines, and essential tips to navigate this year’s tax filing process smoothly.

What would one need to do?

Before April 2024 you need to set up an appointment with a tax advisor or you should start digging through all your receipts and make a file from last July. It is important to prepare yourself well to handle your taxes before they handle you. Ahead of filing for tax, you need to know what is new for this tax season and what is going to be the same as last season.

What are the changes for 2024 tax season?

• Income tax bracket was increased in 2023 to account for inflation.
• In the tax season 2024, the standard deduction increased to $12,200 for single filers and $24,400 for married couples filing jointly.
• Now there is no longer a penalty for not having health insurance coverage.

Know about income brackets and tax rates

Your tax rate (the percentages of your income that you pay in taxes) is based on what tax bracket (income range) you are in.

For example, if you are earning $75,000, then you are in the 22% tax bracket. But that does not mean your tax rate is a flat 22%. Instead, part of your income is taxed at 10%, another part at 12%, and the last part at 22%.

Know about what staying the same for tax season 2024

While some things have been modified for the 2024 tax season, a lot of the changes that went into effect last tax season are still just as relevant today as they were back then. Here are some things that changed last year that still might have an impact on how you file your taxes this year:

• The Child Tax Credit:  It is the 2021 tax reform law that has increased the credit to $2,000 per qualified child and has also increased the income limits for the credit to $400,000 jointly and $200,000 individually.7
• Using 529 Plans: if you have opted for such plan for your child, you can now you can now use it for your ward’s education other than college like for private schooling or tutoring for your child in kindergarten through 12^th grade with no tax. But you need to be careful because withdrawing too much money too soon can leave your child with a dried-up college fund.
• Mortgage Deductions for Homeowners: The maximum mortgage principal in the tax reform law was lowered to $750,000 in 2021. But if you had an existing mortgage in between $750,000 and $1 million before 2021, it can be grandfathered into the old deduction. So there is nothing to worry at all.
• No More Home Equity Debt Deduction: It is not a wise idea to borrow money against your home and now it’s even worse since you are no longer allowed to deduct interest paid on home equity debt.
• The SALT Deduction: You still have a chance to deduct state and local income, sales and property taxes if you decide to itemize your deductions. But you can do that for only up to $10,000 worth.
• Charitable Donations Deduction: You can now have a great chance that it is now possible to deduct up to 60% of your income in qualified charitable donations.

What are the effects of tax season 2024 on retirement savings and health insurance sector?

Know how tax season is changing retirement savings-

• Eradication of the stretch provision for inherited IRAs
• Kiddie tax reverts to Pre TCJA rules
• Contributions to a traditional IRA that may be made past the age of 70.5.
• Qualified disaster distributions of up to $100,000 from retirement accounts
• Required minimum distributions not start at age 72 and not 70.5.
• Penalty free distributions of up to $5,000 for the birth or adoption of a child.
• Expanded withdrawals from 529 plans for apprenticeship programs and student loan repayments

Tax season effect on health insurance penalty-

• Federal tax penalty for not being enrolled in health insurance was removed in 2020 by President Trump.

FAQs (Frequently Asked Questions)

What is the deadline for filing taxes for Tax Season 2024 Canada?

The deadline for filing taxes for Tax Season 2024 Canada is April 30, 2024. However, if you or your spouse is self-employed, the deadline is June 15, 2024.

Can I file my taxes online?

Yes, you can file your taxes online using tax preparation software approved by the Canada Revenue Agency (CRA).

How can I track the status of my tax refund?

You can track the status of tax refund using the CRA’s online services or by calling the Tax Information Phone Service (TIPS) at 1-800-267-6999.

Are there any tax credits available for families?

Yes, there are several tax credits available for families, including the Canada Child Benefit (CCB), Child Care Expense Deduction, and Child Fitness Tax Credit.

How can I reduce my tax bill for Tax Season 2024 Canada?

You can reduce your tax bill by maximizing deductions and tax credits, contributing to registered retirement savings plans (RRSPs), and taking advantage of tax-saving investment strategies.

What should I do if I can’t pay my taxes on time?

If you can’t pay your taxes on time, you should still file your tax return by the deadline to avoid penalties. Explore payment options such as installment plans or applying for taxpayer relief.